Milbon Co., Ltd. Financial Results Presentation Materials

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Milbon Co., Ltd. Financial Results Presentation Materials
Milbon Co., Ltd.
FY2016 Third Quarter (December 21, 2015 – September 20, 2016)
Financial Results Presentation Materials
September 30, 2016
Copyright © 2016 Milbon. All rights reserved.
Table of Contents
P3
Consolidated Operating Results
P4-11
Consolidated Sales by Product Category
P12
Consolidated Statement of Earnings
P13
Consolidated Trends in Capital Expenditures and R&D Expenses
P14
Trends in Market Related Data, Trends in FPs
P15-18 Outlook of Milbon Group
Copyright © 2016 Milbon. All rights reserved.
1
Fiscal Year 2016 (57th term)
Operating Results for the Third Quarter
2
Consolidated Operating Results (FY2016 9 months)
Sales growth in East Asia and Japan has continued to drive Group sales
since the first half of the term
(Unit: million yen)
Amount
FY2015
9 months
FY2016
9 months
YoY
comparison
(%)
Increase/
Decrease
Net sales
19,978
21,424
1,445
107.2
Gross profit
13,943
14,761
817
105.9
SG&A expenses
10,156
10,916
759
107.5
Operating income
3,787
3,845
57
101.5
Ordinary income
3,594
3,495
(98)
97.2
Net income
2,331
2,370
38
101.7
Copyright © 2016 Milbon. All rights reserved.
3
Consolidated Sales by Product Category [Hair Care Product] (1)
Sales expanded steadily, mainly in new leave-in treatment products
(FY2016 9 months)
(Unit: million yen)
FY2015 9 months
FY2016 9 months
11,618
Increase/Decrease
12,760
YoY comparison (%)
1,142
109.8
• We have launched new products that match the needs of two demographic stages: the turning point for women in their 20s, who are
regarded as “awakening to the notion of beauty,” and women in their 50s, “embarking on a quest for beauty.” We are developing
activities to support the creation of various stages of beauty for women by a single designer, while revealing specific examples such as
“communication that captures the demographic turning points” and “from design proposals to proposals for the future.”
• “Elujuda Sun Treatment,” which is effective in providing protection against UV rays, has been added to the Elujuda line, which has been
popular since its launch. Helped by summertime seasonal factors, the product’s abilities to both protect hair against damaging UV rays
and provide texture care were well-received, leading to strong sales.
Core Products
New - DEESSE’S
Elujuda Sun Treatment
New - PLARMIA Volumizer
Leave-in treatment foam that makes women’s
hair stand from the roots and creates a
silhouette with natural volume they can run
their fingers through.
(Unit: million yen)
Leave-in treatment that moisturizes while
protecting hair from UV rays.
(Unit: million yen)
FY target
Results
Prog. rate
700
631
90.2%
Copyright © 2016 Milbon. All rights reserved.
Mar. 31 Debut
4
FY target
Results
Prog. rate
250
291
116.8%
Mar. 1 Debut
Consolidated Sales by Product Category [Hair Care Product] (2)
New - Jemile Fran
Hair Care Series Melty Butter
Leave-in treatment retains the memory of the blowdried style from the night before until the next
morning and allows for quick styling in the morning.
This product helps working women during their
busy mornings.
(Unit: million yen)
FY target
Results
Prog. rate
350
259
74.1%
Copyright © 2016 Milbon. All rights reserved.
Jan. 28 Debut
5
Aujua (1)
Sales grew mainly in the line-ups that meet the growing needs for aging care
Number of salons
FY2015 year-end
2,399
salons
A tailor-made hair care program that nurtures beauty of each and everyone
FY2016 Q3-end
2,692
salons
Sales (FY2016 9 months)
FY2015 9 months
Brand concept
A hair care brand that nurtures the
beauty of Japanese women’s hair,
born from the climate, culture and
hair characteristics of Japan
What is Aujua?
A hair care series that responds to
hair concerns by creating and
evolving a program just for one
individual. This is Aujua.
Copyright © 2016 Milbon. All rights reserved.
112.2%
(Unit: million yen)
FY2016 9 months
2,998
Comparison
with FY2015
year-end
3,426
YoY
comparison
Trends in sales & number of salons
(Million yen)
114.3%
Product range
A wide-ranging line-up
that suits the hair texture
of individual customers
・4 series
(Number of salons)
6,000
3,000
5,000
2,500
4,000
2,000
3,000
1,500
2,000
1,000
1,000
500
0
0
Aging care series
Hair care series
Scalp care series
Climatic care series
販売高
Sales
・15 lines ・96 items
6
取引件数
Number of salons
Aujua (2)
New Product
Aging Care Series
EQUIAL LINE
For women concerned about unmanageable
hair tips and roots as aging advances. Works
on hair’s double-layer structure, creating a
beautiful silhouette.
(Unit: million yen)
FY target
Results
Prog. rate
400
242
60.6%
Copyright © 2016 Milbon. All rights reserved.
Jan. 29 Debut
7
A Global Hair Care Brand, “milbon”
Sales seminars for distributors concluded, and approaching salons shifts into high gear
Brand concept
A system hair care brand that cultivates the “unique beauty” of
each individual, with 360°shiny hair
What is “milbon”?
We conducted an in-depth analysis of the inner structure of
the hair of women from 20 countries around the world, using
our proprietary CT scanning technology, and discovered SSVs
(Sticked-Shaped Voids). SSVs are hollow, tubular gaps that
form in damaged hair. Accordingly, we developed a hair care
line containing ingredients capable of repairing such hollowed
out hair and increasing the density within each strand of hair.
“milbon” is a system hair care product for developing shiny,
beautiful hair from the core.
Number of salons*
As of September 20, 2016・・・・・・959 salons
Sales (FY2016 9 months)*
FY2016 9 months・・・・・・・・・・172 million yen
*Figures are for Japan only.
Copyright © 2016 Milbon. All rights reserved.
8
360° BEAUTIFUL HAIR
Launched consecutively in 12 countries
around the world, from June 1
Consolidated Sales by Product Category [Hair Coloring Product]
Sales boosted by well-received gray-hair coloring products launched last year
(FY2016 9 months)
FY2015 9 months
(Unit: million yen)
FY2016 9 months
7,129
Increase/Decrease
7,529
YoY comparison (%)
399
105.6
• The “ORDEVE MODE LINE,” a new color line to match Fall/Winter 2016 trends, has been launched. Its clear, cold shades that do not have
a hard look and express an air of the casual mode were well-received, and sales have grown steadily.
• We have added new colors to “ORDEVE CRYSTAL,” a gray-hair coloring product launched in FY2015, to increase the variety of cold
shades, along with non-alkaline colors to protect color and hair by controlling damage from repeated hair coloring. We are further
strengthening support activities to increase the value of gray-hair coloring at salons.
Core Products
ORDEVE CRYSTAL
New - ORDEVE’s additional color
MODE LINE
A hybrid color for dying long hair for mature women,
with a beautiful finish from the roots to the tips.
ORDEVE CRYSTAL has the brightness of fashion
colors, and it dyes both black and gray hairs evenly
for a long-lasting finish.
(Unit: million yen)
FY target
Results
Prog. rate
1,980
1,336
67.5%
Copyright © 2016 Milbon. All rights reserved.
Navy color with striking cold shades expressing
a sense of modish trendiness.
(Unit: million yen)
FY2015
Debut
9
FY target
Results
Prog. rate
220
146
66.8%
Sep. 1 Debut
Villa Lodola (1)
Villa Lodola Color, which was launched last year, continues to
drive sales and the number of salons
Number of salons
FY2015 year-end
4,014
salons
FY2016 Q3-end
5,300
salons
Sales (FY2016 9 months)
FY2015 9 months
132.0%
(Unit: million yen)
FY2016 9 months
324
Comparison
with FY2015
year-end
572
YoY
comparison
Trends in sales & number of salons
176.2%
Brand concept
Nurtured in the soil of Italy, these gifts from nature bring out the
authentic beauty of your hair and scalp.
What is Villa Lodola?
Based on the concept of “Beauty, the Organic Way,” Villa Lodola is a
true organic brand that thoroughly cares about the natural
environment not only for the product itself but also in its container,
production phase and promotional tools. All of the products are
certified by ICEA, an Italian authority.
Villa Lodola supports organic choices, with hair care products
nurtured in the soil of Italy, bringing out true beauty.
Copyright © 2016 Milbon. All rights reserved.
(Number of salons)
(Million yen)
10
600
6,000
500
5,000
400
4,000
300
3,000
200
2,000
100
1,000
0
0
2012
2013
2014
Sales
販売高
2015
2016目標
target
取引件数
Number of salons
Villa Lodola (2)
Core Product
Villa Lodola Color
With 92% natural ingredients, the product’s
formulation utilizes the power of plants. It
brings comfort of an organic product across
all aspects, including during application, the
finish and continued use.
(Unit: million yen)
FY target
Results
Prog. rate
315
373
100.4%
Copyright © 2016 Milbon. All rights reserved.
FY2015 Debut
11
Consolidated Statement of Earnings (FY2016 9 months)
(Unit: million yen)
(Unit: million yen)
Amount
FY2015
9 months
Sales
Cost of sales
<Breakdown of net sales by product category>
FY2016
9 months
Increase/
Decrease
YoY
comparison
(%)
19,978
21,424
1,445
107.2
6,035
6,663
628
110.4
FY2016
9 months
11,618
12,760
59.6
1,142
109.8
Hair coloring
products
7,129
7,529
35.1
399
105.6
Permanent wave
products
1,076
972
4.5
(103)
90.4
154
161
0.8
6
104.4
Hair care
products
Others
% total
sales
YoY
change
YoY
compari
-son (%)
FY2015
9 months
<Major factors for the increase/decrease>
Gross profit
13,943
14,761
817
105.9
SG&A
expenses
10,156
10,916
759
107.5
Operating
income
3,787
3,845
57
101.5
Ordinary
income
3,594
3,495
(98)
97.2
Net income
2,331
Copyright © 2016 Milbon. All rights reserved.
2,370
38
*1 SG&A expenses: Salary hikes from increases in the
number of personnel and promotions
*2 Ordinary income: Posting of foreign exchange losses
due to the yen’s appreciation
*1
Supplemental Info. – Return to shareholders
<Dividends>
(Unit: yen)
*2
FY2014
101.7
12
FY2015
FY2016 plan
End of 2Q
34
35
38
End of FY
34
39
40
Total
68
74
78
Consolidated Trends in Capital Expenditures and R&D Expenses
(Unit: million yen)
Category
FY2012
FY2013
FY2014
FY2015
FY2016
Jan.–Sep.
FY2016
Plan
Capital
expenditures
840
1,680
1,028
2,779
3,363
4,329
Depreciation and
amortization
947
878
1,004
1,033
712
1,113
873
969
1,168
1,214
870
1,215
4.0%
4.1%
4.6%
4.4%
4.1%
4.2%
Amount
R&D exp.
% to sales
FY2016 CAPEX Main Items (Plan)
• Expansion of Yumegaoka Plant
• Development of new sales management system (to be introduced in 2017)
• Opening of Okayama Sales Office
• Relocation of Fukuoka Branch
• Opening of Kumamoto Sales Office
Copyright © 2016 Milbon. All rights reserved.
13
Trends in Market Related Data, Trends in Fieldpersons (FPs)
Market trends (Japan)
(Unit: Number of salons: salons / Number of hair dressers: people / Number of beauty customers: thousand people)
2011
2012
2013
2014
Number of salons
228,429
231,134
234,089
237,525
―
―
Number of hair
dressers
471,161
479,509
487,636
496,697
―
―
Number of beauty
customers
39,076
39,640
38,468
2016
2015
37,847
37,395
Remarks
37,140
(As of Apr. 1)
Ministry of Health, Labour and Welfare, Report on
Public Health Administration and Services
Number of beauty salon facilities / number of
employees (year-end)
Statistics Bureau, Ministry of Internal Affairs and
Communications:
Population statistics as of October 1st of each year
Population statistics for females aged 15 to 64
Fieldpersons trends (by country)
*Number of FPs / As of the beginning of the fiscal year (December 21)
2012
2013
2014
2015
2016
200
210
216
237
Milbon Co., Ltd.
102
104
104
100
USA
10
12
12
12
MILBON USA, INC.
35
36
40
53
CHINA
13
16
17
18
Milbon Trading
(Shanghai) Co., Ltd.
14
17
25
36
KOREA
13
17
17
19
Milbon Korea Co., Ltd.
34
41
64
75
3
6
6
6
8
15
4
7
12
16
101
65
50
47
JAPAN
THAILAND
Milbon (Thailand) Co., Ltd.
Others
Copyright © 2016 Milbon. All rights reserved.
-
14
249
Upper column: Number of FPs (persons)
Lower column: Sales per FP (million yen)
9
* 25 FPs completed training on September
20, 2016.
8 FPs will start training on October 3,
2016.
18
20
6
19
(The above 33 FPs are not included in the
left chart.)
Outlook of Milbon Group (1)
East Asia, including Japan, continues to drive growth
Number of
employees
Number of
FPs
Japan
Milbon Co., Ltd.
USA
589
245
14
MILBON USA, INC.
11
CHINA
24
Milbon Trading
(Shanghai) Co., Ltd.
18
KOREA
33
Milbon Korea Co., Ltd.
23
THAILAND
72
Milbon (Thailand) Co.,
Ltd.
Others*
9
21
21
Sales (million yen)
FY2015
9 months
FY2016
9 months
YoY
comparison
(%)
Start
operations
FY2015
FY2016
17,455
18,593
106.8
1960
-
-
472
444
94.0
2004
1 dollar =
118.29
114.95
460
542
117.9
2009
1 yuan =
19.32
17.56
1,046
1,193
114.0
2009
1 won =
0.108
0.099
66
61
91.2
2013
1 baht =
3.60
3.26
477
590
123.6
-
-
-
* Taiwan, Hong-Kong, Vietnam, Malaysia, Turkey, Indonesia, the Philippines and others
Copyright © 2016 Milbon. All rights reserved.
Forex rates
15
Outlook of Milbon Group (2)
JAPAN (Milbon Co., Ltd.)
New products targeting two generations of women in their 20s, “awakening to the notion of beauty,” and in their 50s,
“embarking on a quest for beauty,” were launched. By proposing activities linking hair color with hair care, sales of
products in both categories have steadily increased.
With demand growing for gray-hair coloring due to demographic shifts, gray-hair coloring products ORDEVE CRYSTAL
and Villa Lodola Color in particular were well-received in the market and have driven growth in the hair coloring category.
Sales seminars for distributors on the global hair care brand “milbon,” launched in June, have almost finished, and
approaching salons has moved into high gear. As a result, we expect the pace of increase in the number of contracted
salons to accelerate.
USA (MILBON USA, Inc.)
Joint activities with distributors in the East Coast region, where we have been promoting sales activities through the
distributor, are progressing steadily, and sales to distributors have grown. However, salon sales have fallen owing to the
impact of closures and consolidation of the high-end salons in Manhattan area, where our activities are focused, due to the
timing of renewals of rents, whose costs are soaring.
Proposals that link Plarmia salon treatment with sales of take-home products have been accepted. In the meantime,
there has been stagnation among product groups where the link between salon treatment and sales of take-home
products is weak or brand promotion capabilities are poor. We commenced sales of the global hair care brand “milbon” in
June. The concept of the “salon take-home product business,” with a consistent brand package and name, is being
accepted. The product is expected to perform well in the future.
Copyright © 2016 Milbon. All rights reserved.
16
Outlook of Milbon Group (3)
CHINA (Milbon Trading (Shanghai) Co., Ltd.)
Women born in the 80s and 90s, who tend to have high levels of beauty awareness, have significant needs, demanding
hair designs that suit them. Their demands for hair color and hair treatment are especially high. We have responded by
strengthening educational activities at salons and addressing the personal needs with seasonal color proposals and the
introduction of a new color that dyes hair to have the ever-popular color of foreign models’ hair, which have been wellreceived.
Top management in China’s leading cities, where we are currently pushing ahead with expansion, recognizes that
customer satisfaction and human-resource development are important issues for salon management. Milbon’s unique
marketing activities allow us to differentiate our brand from other companies, and the reception has been very positive.
Development of local staff is becoming a major driving force.
We will establish an office with a studio in Southwest China (Chengdu, Sichuan Province) in November 2016 to
strengthen our marketing activities. We are planning to expand into new areas, based on further reinforcement of
marketing activities in existing areas.
KOREA (Milbon Korea Co., Ltd.)
The regular addition of new colors for ORDEVE hair coloring product allows us to propose new colors to salon
customers who are always looking for something new. This unique attraction, not found at other companies, drives overall
sales for ORDEVE.
We are carrying out development focused on our hair care products with the aim of transitioning to the “Comprehensive
Milbon brand,” as positive recognition of the “Milbon of hair color products” expands. Plarmia has been smoothly
introduced through activities such as the “quick and cool summer campaign.” This offered proposals for quick and easy
care from the scalp to the tips of the hair, arousing responses from salons.
Aujua is now being test marketed, and we are seeing results from the product from building extremely good
relationships with salons through visits and educational activities in close coordination with each salon. We aim to reinforce
the activity by adding a member to the Aujua team with a view to the full-fledged marketing activities scheduled from
October.
Copyright © 2016 Milbon. All rights reserved.
17
Outlook of Milbon Group (4)
THAILAND (Milbon (Thailand) Co., Ltd.)
[Sales division]
As our transaction amount with major salons has begun to increase and our brand recognition in the industry is rising
gradually, sales are steadily improving in every quarter.
We have repeatedly held hair-coloring seminars, which have received positive responses, and sales of hair coloring
products are growing. With regard to permanent wave products, digital perm seminars given by Japanese hair dressers
have been well-received, and the Liscio Atenje brand of straight perm products has grown significantly.
[Production division]
Production volume of hair coloring products is growing with a view to introducing new hair colors in each country. The
production launch of the global hair care brand “milbon” has led to a rise in the production ratio of hair care products.
Shipping destinations currently comprise 10 countries. Shipments have steadily grown, exceeding the planned amount
by 16.5%.
The improvement of the cost of sales ratio is also progressing steadily, as efforts are being made to raise the efficiency
of the production facilities and increase production volume, in addition to procuring raw materials locally and reducing
expenses.
Copyright © 2016 Milbon. All rights reserved.
18
Statements concerning the future such as the earnings forecasts given in this
document are based on information currently in the possession of the Company and
on assumptions that the Company considers reasonable.

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